A month ago, I wrote about the governor’s plan to reorganize the Missouri Department of Economic Development (DED). I’ve had an opportunity to learn more about the major restructuring of this state agency, so I thought it would be good to share more details.
First, it’s important to point out that Missouri is uniquely positioned to succeed. Our central location means that we are less than a two-day drive from anywhere in the contiguous 48 states. A number of major U.S. interstate highways pass through our state. We’re home to two of America’s great rivers and are well-served by the nation’s rail lines. Our employees have a strong work ethic. Our taxes are low, as is the cost of living in Missouri. And while the harsh winter we’ve experienced this year may make us wonder, our weather is generally mild. There really is no reason why Missouri should not be an economic powerhouse.
And yet, the governor and the director of the DED tell us that our state has underperformed relative to our neighbors.
Among 14 Midwestern states surrounding Missouri, our gross domestic product growth ranked dead last. Eight of those states outperformed us in job growth. Seven of our neighbors grew wages faster. We were No. 11 in per capita income and 12th in labor productivity.
I am the last person to say that governments create jobs. But when you have a state agency that is tasked with economic development, it makes sense to take a look at how they’re doing at their primary mission. In Missouri’s case, the answer has been “not very well.”
The Missouri DED has had seven directors in the past 10 years. During all that time, the department has not taken a good hard look at its overall strategy to see how it’s doing. Our new governor made that a priority.
What the governor found was a bloated state agency, with too many divisions that were not related to the primary missions of creating jobs and spurring economic activity in Missouri. While other states devote a third or more of their economic development agency’s resources to job creation, a paltry 4 percent of the Missouri DED budget was spent on business development.
Missouri’s DED had 865 employees, the largest staff of any economic development agency in the Midwest. The average number of employees for all the similar agencies in the region was 154. It’s not that the Missouri DED was full of unnecessary workers, but the agency had too many separate functions under its roof. The Department of Economic Development had become a catch-all for random programs and orphaned offices of state government.
The governor has proposed splitting up DED. The Division of Energy moves to the Department of Natural Resources. The Public Service Commission will now be part of the Department of Insurance, Fiscal Institutions and Professional Registration. The Missouri Arts Council will now be in the lieutenant governor’s office. The Department of Higher Education will oversee the Division of Workforce Development.
The new Missouri DED will be much smaller, with a staff of about 175 employees. In explaining the reorganization, the agency’s director says DED will be “laser-focused, customer-centric, regionally targeted and data-driven.”
I’m confident that focusing on the department’s core mission will bring better results than what we’ve seen in the past. The agency sure has plenty to work with. Missouri is a great state, populated with honest, hard-working people. We are well positioned to move forward. I’m hoping this reorganized state agency can help us do just that.
As always, I appreciate it when groups from around Missouri and from our community back home come to visit me at the Capitol. If you would like to arrange a time to come and visit me in Jefferson City, or if you ever have any questions, please don’t hesitate to contact my Capitol office at (573) 751-1882.